Lg Soft India Pvt. Ltd vs Commissioner Of Service Tax Bangalore
- CitationAppeal No. 385/2011
Ratio decidendi
The rule this decision rests on
The Tribunal treats the refund claims as having to be remanded because the grounds for rejection are contested and the refund question is to be decided afresh in light of the Tribunal's earlier decision in Apotex Research Pvt. Ltd.; the reasoning given is as follows. Reimbursement of travel expenses forming part of the consideration for taxable output services is to be treated as consideration received for the provision of services, since all expenses incurred to provide the services are includible in the value, and the revenue cannot take a stance on this that is inconsistent with its stance in domestic cases. A non-conformity of the export invoice with Rule 4A of the Service Tax Rules, 1991 is a procedural lapse which the notification does not make mandatory; the relevant enquiry is whether cenvat credit has accumulated that could not have been utilised by the claimant, and where that is shown, refund cannot be denied on the ground of such non-conformity, nor absent a finding that there was no export of service. Input services such as renting of immovable property and telecommunication services cannot be said to lack nexus with the output service merely because the output service is rendered offshore, since services cannot be provided without premises and telephone facilities, so refund cannot be denied on that ground. The correlation of export invoices with FIRCs and the question of registration are to be decided in accordance with the Tribunal's decision in Apotex Research Pvt. Ltd. and others, which the Tribunal applies by remanding the matter for the original authority to decide afresh.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
ST/138/2012-DB, ST/139/2012-DB, ST/140/2012-DB, ST/141/2012-DB, ST/2987/2012-DB
[Arising out of Order-in-Appeal No. 385/2011 dated 30/09/2011 passed by the Commissioner of Central Excise, Bangalore] [Arising out of Order-in-Appeal No. 386/2011 dated 30/09/2011 passed by the Commissioner of Central Excise, Bangalore] [Arising out of Order-in-Appeal No. 387/2011 dated 30/09/2011 passed by the Commissioner of Central Excise, Bangalore] [Arising out of Order-in-Appeal No. 388/2011 dated 30/09/2011 passed by the Commissioner of Central Excise, Bangalore] [Arising out of Order-in-Appeal No. 186/2012 dated 23/07/2012 passed by the Commissioner of Customs, Central Excise & Service Tax, Hyderabad]
For approval and signature:
HON'BLE Mrs. ARCHANA WADHWA, JUDICIAL MEMBER HON'BLE Mr. B.S.V. MURTHY, TECHNICAL MEMBER
1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? No 2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? No 3 Whether Their Lordships wish to see the fair copy of the Order? Seen 4 Whether Order is to be circulated to the Departmental authorities? Yes
LG Soft India Pvt. Ltd. Embassy Tech Square, Marathalli, Sarjapur Outer Ring Road, Bangalore - 560 103 Appellant(s)
Xilinx India Technology Services Pvt. Ltd. Unit No.03-01, 3rd Floor, Block 1, Cyber Pearl, Hitech City, Madhapur, Hyderabad - 500 081 Appellant(s) Versus Commissioner of Service Tax Bangalore 1st To 5th Floor, TTMC Building, Above BMTC Bus Stand, Domlur Bangalore 560 071 Karnataka Respondent(s)
Commissioner of Customs, Central Excise and Service Tax Hyderabad-IV Posnett Bhavan, Tilak Road, Ramkoti, Hyderabad 500 001 Andhra Pradesh Respondent(s) Appearance:
Mr. Harish Bindumadhavan, Advocate 100/2, Richmond Road, Bangalore 560 025 For the Appellant
Mr. Pakshi Rajan, AR For the Respondent
Date of Hearing: 28/04/2015 Date of Decision: 28/04/2015 CORAM:
HON'BLE Mrs. ARCHANA WADHWA, JUDICIAL MEMBER HON'BLE Mr. B.S.V. MURTHY, TECHNICAL MEMBER
Final Order Nos. 21065-21069 / 2015
Per: B.S.V. MURTHY
In all the four appeals the issue involved is eligibility of the appellant for refund of accumulated cenvat credit under Rule 5 of Cenvat Credit Rules 2006 under Notification No. 5/2006 dated 13.03.2006. Total amount involved is more than Rs. 3.18 crores (Rupees Three Crores Eighteen Lakhs approximately).
2. It was submitted that the refund claims have been rejected on different grounds in different appeals and contradictory stands have been taken on the same issue in different orders. It was submitted that on the following grounds refund claims have been rejected.
a) Provisions of Rule 5 of Cenvat Credit Rules and Notification No. 5/2006-CE (NT) are applicable only to registered premises.
b) There is no proper correlation between export invoices and FIRCs since FIRC does not have invoice references.
c) Input services such as Renting of Immovable Property and Telecommunication Services have no nexus with the output service and have not been used for providing output services as the services are being rendered offshore.
d) Export invoices are not in accordance with Rule 4A of Service Tax Rules 1991.
e) Certain export invoices have been raised towards reimbursement and hence no export of service is involved and cannot be considered for sanctioning of refund.
f) Rendering of services offshore does not qualify as export of services.
3. It was submitted that as regards reimbursement, it was actually reimbursement of travel expenses which is part and parcel of providing output services and also is very essential in providing output services. Reimbursement of travel expenses is only 3.85% of total turnover. In our opinion, this has to be taken as consideration received for provision of services since all expenses incurred for providing the services are required to be included. In the case of domestic service providers in domestic tariff area, such costs are being included and Revenue has been consistently taking the stand that such costs are includible. Therefore in our opinion different stand cannot be taken. As regards non conformity of the export invoice to the requirements of Rule 4A, it was submitted that it is only a procedural lapse and notification does not require and it is not mandatory. What is required to be examined is whether cenvat credit has been accumulated and could not have been used by the claimant and once it is proved that cenvat credit accumulated could not have been used by the person claiming the refund, it would be unfair to reject the refund on the ground that service tax invoice was not in accordance with Rule 4A. In the absence of finding that there is no export of service, refund cannot be denied. As regards Renting of Immovable Property Service and Telecom Service, it cannot be imagined how service could be provided without a building and without providing telephone facilities. In our opinion refund cannot be denied on this ground. As regards correlation with FIRC, this issue was considered by the Tribunal in the case of Apotex Research Pvt. Ltd. and others vide Interim Order Nos. 79 to 152/2014 dated 18.09.2014 and since in any case the matter has to be remanded to the original authority, the issue may be considered in the light of that decision. As regards non submission of documents, it is the claim of the appellant that they had submitted all the documents. Nevertheless copies can be submitted when the matter is taken up afresh on remand. As regards registration, this Tribunal has already decided the issue in the case of Apotex Research Pvt. Ltd. and others.
4. Since the issue involved is refund claim, the matter has to be remanded. Accordingly the impugned orders are set aside and all the refund claims are remanded back for fresh consideration in the light of the decision in the case of Apotex Research Pvt. Ltd. and others and other decisions that may be cited before the original authority. All the appeals are disposed of in the above terms.
5. Both sides agree that another appeal filed by M/s. Xilinx India Technology Services Pvt. Ltd. also involves similar issues and the only difference being that in respect of several services, claim has been rejected on the ground of nexus. Since the issues have been considered in the Apotex Research Pvt. Ltd. by this Tribunal and there are several other decisions which have been considered by the Tribunal, it was submitted that this appeal also may be remanded to the original authority with the directions to reconsider the refund claims in the light of the decisions in the case of Apotex Research Pvt. Ltd. and other decisions that may be cited before the original authority. We find the submissions valid. Accordingly the appeal filed by M/s. Xilinx India Technology Services Pvt. Ltd. is also remanded back to the original authority for reconsideration in the light of decision of this Tribunal and other decisions that are already considered and that may be cited before the original authority.
(Order pronounced in open court)
(B.S.V. MURTHY) TECHNICAL MEMBER (ARCHANA WADHWA) JUDICIAL MEMBER
iss
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